| Mon 8 Jun 2009, 8:30 | | MIX - Mix Telematics - Audited consolidated financial information of Mix |
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MIX
MIX
MIX - Mix Telematics - Audited consolidated financial information of Mix
Telematics Limited for the year ended 31 March 2009 and unaudited illustrative
pro forma financial information
MiX TELEMATICS LIMITED
(Previously TeliMatrix Limited)
Incorporated in the Republic of South Africa
Registration number 1995/013858/06
JSE code: MIX
ISIN: ZAE000125316 (previously ISIN: ZAE000104683)
("MiX Telematics" or "the Company" or "the Group")
AUDITED CONSOLIDATED FINANCIAL INFORMATION OF MIX TELEMATICS LIMITED FOR THE
YEAR ENDED 31 MARCH 2009 AND UNAUDITED ILLUSTRATIVE PRO FORMA FINANCIAL
INFORMATION
HIGHLIGHTS
- Adjusted HEPS of 15,9 cents per share (up 25%*)
- Dividend declared of 4 cents per share
- Revenue of R958 million (up 39%*)
- R419 million annuity based
- R426 million in foreign currency
- Cash from operations at 115% of EBITDA
- Net borrowings reduced by R65 million
- Net gearing at 14% of Group equity (2008: 26%)
- > 200 000 subscribers
* compared to pro forma comparatives for prior year
A FEW WORDS FROM THE CHAIRMAN, RICHARD BRUYNS ...
It is with pleasure that I am able to report that the Group, in its first full
year of operation, has achieved significant strides in many of its stated
objectives of last year.
In spite of a significantly worse global economic climate than what was expected
at the beginning of the financial year, MiX Telematics has managed to grow its
adjusted HEPS by a healthy 25%, up to 15,9 cents per share (from 12,7 cents per
share pro forma 2008). This is considered a very sound performance and creates a
solid base from which the Group will operate into the future.
Dividends per share for the whole year, have been declared at 4 cents per share
(4-times cover from adjusted HEPS). In the current difficult and uncertain
climate, the board thought it prudent to maintain a higher cover to conserve
cash, than perhaps could have been paid out in more normal times.
Our management team has evolved this year and now has a much more international
focus. Stefan Joselowitz, our CEO has relocated to the USA. He has overall Group
responsibility as CEO and is also directly overseeing our acquisition in Dallas.
Terry Buzer has relocated to the UK as CEO of the UK and Europe group interests.
Simon Williams, who joined us with the acquisition of SDI, has located himself
in Dubai, and is heading that operation from this important hub. Charles Tasker,
a prolific business traveller, is based in Stellenbosch, from where he heads up
MiX International. Riette Botha who runs our Africa business and Steven Evans
(Group CFO) are based in Johannesburg. Our management team has gone through a
tough transition to achieve this international focus, but have adapted to the
new structure well. The board and executive are very mindful of the risks of
this international focus, but believe this will bear great reward as the team
thinks and operates globally. Already a number of major sales have been achieved
with this boundary-less mindset.
2009 and 2010 are going to be difficult years for businesses worldwide. MiX
Telematics operates globally and is intent on growing its international presence
strongly into the future. We have the management capability to achieve this
growth and the executive team has set themselves some high targets moving
forward. Everyone is acutely aware of the challenges business face in these
uncertain times, and the board at MiX Telematics believes the Group will show
growth into the future, although forecasting is not feasible at the present
time. Suffice it to say, the Group has great products, really good and talented
people, a critical mass and a positive cash flow to achieve its medium-term
plans.
Joss and I wish to express our, and the board`s, sincere thanks to our executive
team for an outstanding year in extremely difficult times. To our 700 employees
of the Group around the world, we thank you for all your efforts in a difficult
year. And to the non-executive board members, many thanks again for your time
and wise counsel.
A FEW WORDS FROM THE CEO, STEFAN "JOSS" JOSELOWITZ ...
These results would have been good in any normal year but in the year that we
have just endured, they are particularly pleasing. This is thanks to a great
team that delivered, despite facing brutal trading conditions.
When we published our half-year update in November 2008, I alluded to a belief
that we had positioned ourselves well for a strong second half: I am now happy
to report that all of our original businesses being "MiX Africa", "MiX EuropeUK"
and "MiX International" performed ahead of plan. For those investors bent on
segmental analysis, a word of caution - we have moved things around within and
between individual business units to achieve maximum efficiency. Our two mega-
deal projects - debis (in South Africa) and Go-Ahead Bus (in the UK) - were both
fully implemented in the year under review. We have now repeatedly demonstrated
in South Africa, Europe, the Middle-East and the USA that we are capable of
effectively rolling out huge projects and this bolsters our resume when pitching
for other mega-deals (which we are doing on an ongoing basis).
Born out of our acquisition of Tripmaster last year, MiX North America has been
successfully transitioned into the Group. Based in Dallas, USA, this business
has scored two quick wins in the period, the first of which - Baker Hughes - has
been completely rolled out. We are in the process of finalising some
customisation for Chevron and expect to conclude installation of the fleet in
the next quarter. I relocated to the USA earlier this year and this move is a
clear indication that we are serious about the globalisation of the Group.
The anticipated opportunity in SDI, our most recent acquisition, has thus far
not disappointed and the synergies that we have unlocked have already exceeded
our initial expectations. This business also dovetails nicely with our efforts
in the USA, with many cross-pollination opportunities becoming apparent.
In terms of the numbers, they speak for themselves and I am spoilt for choice in
terms of areas that deserve special mention - so I will take the easy path and
revert to my three favourite picks, namely "annuity revenue", "foreign revenue"
and "cash":
- Our annuity revenue grew by 21% to R419 million, making up almost 44% of our
total revenue,
- Foreign revenue increased by an impressive 45% to R426 million and is a solid
indicator that our global ambitions are taking traction,
- Your team delivered fantastic cash generation from operating activities of
R139 million for the year.
Looked at another way, our net debt position (total borrowings, including
overdraft, net of cash on hand) reduced from R154 million last year to R89
million this year, an improvement of R65 million! Net gearing in the Group now
stands at 14% of Group Equity, down from last year`s level of 26%. Net interest
cover at EBITDA level is at 7,6 times, vs. last year (pro forma) of 7,0 times.
Generally these levels would be considered to be conservative, but your board
has prudently decided to de-gear the Group in the current times.
So, having concluded our first full year of operations as a merged and listed
entity (whew!), I can report that I am satisfied with the progress that the
Group has made towards achieving both our short and medium-term objectives.
Forgive me for pointing out the obvious, but global trading conditions remain
extremely tough and in some regions have deteriorated even further than last
year. For now, our focus will remain on weathering the storm whilst executing
well on the basics.
BUSINESS OVERVIEW
MiX Telematics is a Group that is focused on all levels of vehicle telematics,
combining vehicle tracking, driver/passenger safety and recovery services with a
complete range of fleet management products and services.
DIVIDEND DISTRIBUTION
Shareholders are advised that the directors have resolved to declare a cash
dividend of 4 cents per share for the year ended 31 March 2009.
The salient dates are as follows:
Last date to trade cum dividend Friday, 24 July 2009
Trading ex dividend commences Monday, 27 July 2009
Record date Friday, 31 July 2009
Payment date Monday, 3 August 2009
Shares may not be dematerialised or rematerialised between Monday, 27 July 2009
and Friday, 31 July 2009, both dates inclusive.
INCOME STATEMENT WITH COMPARATIVE PRO FORMA INFORMATION
The Income Statement below has been compiled for illustrative purposes using the
audited results for the year ended 31 March 2009 and the pro forma Income
Statement of the Group for the year ended 31 March 2008 as comparatives.
PRO FORMA INCOME STATEMENT
Year ended Pro forma
Year ended
(R000`s) 31 March 2009 31 March 2008
Revenue 958 139 687 547
Cost of sales (386 482) (258 255)
Gross profit 571 657 429 292
Other operating income 10 210 11 059
Other operating expenses (384 487) (280 110)
Earnings before interest, tax, depreciation, 197 380 160 241
amortisation, impairment and negative goodwill
("EBITDA")
Depreciation and amortisation (24 896) (20 070)
Amortisation arising from the purchase price (26 798) (21 939)
allocation required by IFRS3
Impairment of intangible and available for sale (11 954) -
financial assets
Negative goodwill 1 325 -
Earnings before interest and tax ("EBIT") 135 057 118 232
Finance income 1 023 1 714
Finance costs (26 954) (24 623)
Share of joint venture losses (916) -
Profit before tax 108 210 95 323
Taxation expense (39 125) (33 120)
Profit for the period 69 085 62 203
Loss/(profit) on disposal of property, plant 344 (47)
and equipment (after tax)
Impairment of assets 11 954 -
Negative goodwill (1 325) -
Headline earnings 80 058 62 156
Amortisation arising from the purchase price 23 569 15 471
allocations required by IFRS3 (after tax)
Impact of tax rate reductions arising from the - (1 651)
above purchase price allocations
One-off adjustments resulting from Omnibridge - 5 265
business combination
Adjusted headline earnings 103 627 81 241
Weighted average shares (000`s) 649 917 640 000
Earnings per share (cents) 10,6 9,7
Headline earnings per share (cents) 12,3 9,7
Adjusted headline earnings per share (cents) 15,9 12,7
Segmental analysis
Revenue
- Vehicle tracking 332 918 300 877
- Fleet management 625 221 386 670
Revenue 958 139 687 547
EBITDA
- Vehicle tracking 77 343 83 601
- Fleet management 126 346 78 187
- Other (6 309) (1 547)
EBITDA 197 380 160 241
NOTE TO THE 2008 COMPARATIVE PRO FORMA INCOME STATEMENT
The pro forma comparative results to 31 March 2008 were prepared on the basis
that the acquisition of OmniBridge RSA and OmniBridge Europe had been effective
1 April 2007.
This comparative pro forma Income Statement has been prepared by management in
an effort to provide a meaningful basis of comparison for users of the Group`s
financial information and is the responsibility of the directors of MiX
Telematics. By its nature, the comparative pro forma information may not fairly
reflect the financial results of the Group after the acquisitions of OmniBridge
RSA and OmniBridge Europe on 1 October 2007.
The adjusted headline earnings per share reflects the results after eliminating:
- The IFRS3 amortisation expense (after tax) in respect of intangible assets
that arose on the acquisition of OmniBridge RSA and OmniBridge Europe in 2007
and the SafeDrive International Group in 2008.
- Certain expenses in the year ended 31 March 2008 that arose as a result of
the transaction to acquire OmniBridge RSA and OmniBridge Europe which were not
representative of the Group going forward, these amounted to R5,3 million.
An unqualified reporting accountant`s report was issued on the pro forma Income
Statement of the Group for the year ended 31 March 2008.
AUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2009
CONDENSED CONSOLIDATED INCOME STATEMENT
(R000`s) Audited
Year ended Audited
31 March 2009 Year ended
31 March 2008
Revenue 958 139 504 490
Cost of sales (393 515) (204 885)
Gross profit 564 624 299 605
Other income 10 210 8 229
Other operating expenses (439 777) (209 942)
Operating profit 135 057 97 892
Finance income 1 023 1 242
Finance costs (26 954) (16 779)
Share of joint venture losses (916) -
Profit before tax 108 210 82 355
Taxation expense (39 125) (25 250)
Profit for the period 69 085 57 105
Attributable to:
- Equity shareholders 69 085 52 504
- Minority shareholders - 4 601
69 085 57 105
Total shares (000`s) 657 000 640 000
Weighted average shares (000`s) 649 917 440 000
Earnings per share (cents) 10,6 11,9
Weighted average dilutive shares (000`s) 649 917 440 155
Diluted earnings per share (cents) 10,6 11,9
Dividend per share (cents) 1,5 6,5
CONDENSED CONSOLIDATED BALANCE SHEET
(R000`s) Audited Audited
At At
31 March 2009 31 March 2008
Assets
Non-current assets
Property, plant and equipment 51 755 52 036
Intangible assets 693 345 695 917
Available for sale and other investments 3 675 5 024
Deferred taxation 13 481 10 337
Total non-current assets 762 256 763 314
Current assets
Inventory - other 40 544 59 406
Inventory held in client vehicles 23 456 24 000
Trade and other receivables 135 396 121 540
Income tax receivable 436 79
Cash and cash equivalents 140 095 29 590
Restricted cash 1 351 1 000
Total current assets 341 278 235 615
Total assets 1 103 534 998 929
Equity and liabilities
Capital and reserves
Share capital 13 13
Share premium 787 353 770 353
Accumulated losses (3 046) (62 531)
Other reserves (126 893) (109 817)
Total equity 657 427 598 018
Non-current liabilities
Interest bearing borrowings 120 232 95 127
Deferred taxation 35 611 40 043
Provisions 17 886 19 066
Total non-current liabilities 173 729 154 236
Current liabilities
Trade and other payables 139 511 124 702
Income tax payable 10 603 25 287
Bank overdraft 27 732 31 256
Interest bearing borrowings 81 170 56 827
Provisions 13 362 8 603
Total current liabilities 272 378 246 675
Total equity and liabilities 1 103 534 998 929
Net asset value per share (cents) 100,1 93,4
Net tangible asset value per share (cents) (5,5) (15,3)
Total borrowings and overdraft 229 134 183 210
Less: Cash on hand (excluding restricted cash) (140 095) (29 590)
Total borrowings, net of cash on hand 89 039 153 620
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(R000`s) Audited
Audited Year ended
Year ended 31 March 2008
31 March 2009
Operating activities
Cash generated from operations 226 497 114 928
Finance income received 1 023 1 242
Finance costs paid (26 887) (16 257)
Taxation paid (61 491) (13 023)
Net cash generated from operating activities 139 142 86 890
Investing activities
Net additions to property, plant and equipment (29 883) (16 630)
and intangible assets
Net cash (outflow)/inflow on acquisition of (31 045) 14 672
subsidiaries
Net cash utilised by investing activities (60 928) (1 958)
Financing activities
Net increase in borrowings 47 010 32 118
Dividends paid (9 600) (20 667)
Share issue expenses and vendor loans settled - (108 454)
Net cash generated by/(utilized in)financing 37 410 (97 003)
activities
Net increase/(decrease) in cash and cash 115 624 (12 071)
equivalents
Cash and cash equivalents at beginning of the (1 666) 7 732
year
Foreign exchange gains on cash and cash (1 595) 2 673
equivalents
Cash and cash equivalents at end of the year 112 363 (1 666)
CONDENSED STATEMENT OF CHANGES IN EQUITY
(R000`s) Audited Audited
Year ended Year ended
31 March 2009 31 March 2008
Opening balance 598 018 (81 546)
Attributable net profit for the period 69 085 52 504
Minority interest - 4 601
Dividends paid
- paid to equity holders (9 600) (15 500)
- paid to minority - (5 167)
Share based payments 2 006 155
Minority share acquisition
- Shares issued - 155 302
- Minority Interest acquired - (17 408)
- Transaction with minority - (137 894)
Shares to be issued/issued on business 17 000 615 048
combination, net of listing costs
Foreign currency translation differences (17 888) 27 569
Revaluation of shareholder loan (1 711) 871
Fair value reserve on available for sale 517 (517)
financial asset
Closing balance 657 427 598 018
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION
1. Basis of preparation
The condensed consolidated financial information ("financial information") is
based on the audited financial statements of the Group for the year ended 31
March 2009, which have been prepared in accordance with International Financial
Reporting Standards ("IFRS"), and has been compiled in accordance with
International Accounting Standard 34 (Interim Reporting), the Listings
Requirements of the JSE Limited and the South African Companies Act (1973) as
amended. The principal accounting policies used are consistent with those
applied in the previous year.
2. Business combinations
Effective 1 August 2008 MiX Telematics acquired 100% of the issued share capital
of Tripmaster (a US registered company), subsequently renamed MiX Telematics
North America, for a nominal consideration.
Effective 1 September 2008 MiX Telematics acquired the SafeDrive International
Group of companies ("SDI") - comprising 100% of the issued share capital of
SafeDrive International (an Australian registered company), 100% of the issued
share capital of SafeDrive FZE (a UAE registered company), and a 49% interest in
Driver Training International Middle East and Africa (a UAE registered entity) -
for a total purchase consideration of AUD6 million and 17 million ordinary
shares, which will be issued at R1,00 each, which approximated the market value
of the MiX Telematics share on the effective date of the acquisition.
Had these acquisitions both been effective from 1 April 2008, the Group`s
revenue for the year would have increased by R50 million and the profit after
tax for the year would have increased by R3 million. Tripmaster and SDI
contributed combined revenues of R119 million to the Group for the year and a
combined net profit after tax of R15 million to the Group for the year. These
amounts have been calculated using the Group`s accounting policies.
Details of the net assets acquired are as follows:
BUSINESS COMBINATIONS
SDI Group Tripmaster
(R000`s) Fair Fair
value* value*
Property, plant and equipment 2 497 678
Intangible assets 8 850 402
Inventory 4 179 3 086
Trade and other receivables 14 521 2 308
Cash and cash equivalents 6 317 2 458
Deferred taxation liability (248) -
Borrowings (1 798) (170)
Trade and other payables (7 343) (7 068)
Provisions and other liabilities (1 344) (369)
Net asset value 25 631 1 325
Purchase consideration 57 232 -
Negative goodwill credited to income statement* - 1 325
Less: Net Asset Value acquired* (25 631) (1 325)
Goodwill (included in intangible assets)* 31 601 -
Purchase consideration 57 232 -
Less: Foreign exchange gain (411) -
Less: To be settled through equity issue (17 000) -
Less: Cash acquired (6 317) (2 458)
Net cash outflow/(inflow) of business combination 33 504 (2 458)
* determined on a provisional basis only
The initial accounting for the above business combinations has been determined
on a provisional basis as the determination of fair values of all tangible
assets and liabilities and the valuation of underlying intangible assets is
still being finalised. With the acquisitions having been concluded in the months
close to the year end, it was not possible to have the initial accounting
finalised for year end. The provisionally determined goodwill is expected to
change once the fair values of both the tangible and intangible assets and
liabilities have been finally determined. It should be noted that the negative
goodwill and the amortisation of IFRS3 intangible assets reflected in the income
statement have also been determined on a provisional basis, accordingly these
amounts could change with the final determination of the initial accounting for
these business combinations.
3. Changes to share capital
The Company agreed to issue 17 million ordinary shares during the year as part
of the purchase consideration for the acquisition of SDI - refer note 2. These
shares had not been issued at year-end, however the share capital and the
premium thereon has been accounted for from 1 September 2008, being the
effective date of acquisition for accounting purposes. The shares were included
in the weighted average number of shares in issue for the year and in the number
of shares in issue at year end.
4. Borrowings
During the year under review, the total borrowings (including overdraft)
increased to R229 million (31 March 2008: R183 million), with the components of
this change summarised as:
- R41 million to fund the purchase of the SDI Group (refer note 2 above),
- R29 million of net repayments made,
- R2 million additional debt taken on with the acquisition of SDI & Tripmaster,
- R35 million of facilities drawn down and placed on call and
- R3 million reduction in overdrafts.
Total borrowings, net of cash, have reduced to R89 million from R154 million at
the end of the last financial year.
5. Segmental analysis
The Group has the following primary reporting segments:
- Vehicle tracking (comprising MiX Telematics Africa, excluding MiX Enterprise)
and
- Fleet management (comprising MiX Telematics International, Enterprise,
Europe, North America and SDI).
SEGMENTAL ANALYSIS
(R000`s) Audited Audited
Year ended Year ended
31 March 2009 31 March 2008
Revenue
- Vehicle tracking 332 918 300 877
- Fleet management 625 221 203 613
Revenue 958 139 504 490
Segment result
- Vehicle tracking 68 499 75 733
- Fleet management 74 595 23 706
- Other (6 309) (1 547)
Segment result 136 785 97 892
Impairment of available for sale financial (1 728) -
asset
Operating profit 135 057 97 892
6. Headline and diluted headline earnings per share
HEADLINE EARNINGS RECONCILIATION
(R000`s) Audited Audited
Year ended Year ended
31 March 2009 31 March 2008
Reconciliation of headline earnings
Attributable earnings 69 085 52 504
Loss/(profit) on disposal of property, plant 344 (47)
and equipment (after tax)
Impairment of assets 11 954 -
Negative goodwill (1 325) -
Headline earnings 80 058 52 457
Total shares (000`s) 657 000 640 000
Weighted average shares (000`s) 649 917 440 000
Headline earnings per share 12,3 11,9
Weighted average dilutive shares (000`s) 649 917 440 155
Diluted headline earnings per share 12,3 11,9
7. Impairment of assets
During the year, certain intangible assets that had arisen on the initial
acquisition of MiX Telematics Europe were impaired by R10,2 million to their
fair value.
The investment in listed securities held by MiX Telematics Europe were impaired
by R1,7 million to their fair value, being the market value at 31 March 2009.
8. Dividends
A dividend of R9,6 million (2008: R15,5 million) was paid during the year. Using
shares in issue of 640 million (2008: 240 million), this equates to a dividend
of 1,5 (2008: 6,5) cents per share.
9. Contingent liabilities
9.1. Connection incentives
The Group has received connection/upgrade incentives from Mobile Telephone
Networks (Proprietary) Limited for connecting subscribers to their network. In
the event that the subscriber contract is terminated during the two year service
contract period, the full amount of the connection/upgrade incentive received
for this subscriber contract becomes repayable. In the unlikely event that all
subscriber contracts are terminated prematurely, the potential liability would
amount to R78,9 million (31 March 2008: R77,6 million). No loss is expected
under this arrangement.
9.2. Vehicle Security Association of South Africa (`VESA`)
As previously reported, the Competition Commission has referred a complaint that
VESA (of which MiX Telematics Africa was a member) had engaged in anti-
competitive behaviour. This complaint is being heard by the Competition Tribunal
and will continue over the next few months. The Group has been advised that, due
to the nature of the complaint, there should be no monetary damages in the
unlikely event of an adverse finding. The Group will continue to incur costs
associated with defending this matter.
9.3. Net working capital dispute
The Group remains in dispute with the vendors of OmniBridge RSA and OmniBridge
Europe regarding the fair value of net working capital in the businesses at the
effective date of acquisition. The dispute is being resolved in terms of the
sale of shares agreement. Any award made will have no material impact on
earnings and the Group has not accounted for any of the amounts claimed by it in
the dispute. Management does not expect the impact of this to be material.
10. Capital commitments
At 31 March 2009, capital commitments authorised but not yet contracted for the
year ahead amounted to R10 million (31 March 2008: R28 million).
11. Subsequent events
Other than the dividend declared of 4 cents per share, no other material events
have occurred between 1 April 2009 and the date of these results.
12. Independent audit
The condensed consolidated financial information has been audited by our
auditors, PricewaterhouseCoopers Inc., who have performed their audit in
accordance with International Standards on Auditing. A copy of their unqualified
audit report is available for inspection at the registered office of the
Company.
8 June 2009
MiX TELEMATICS LIMITED
Registered Office
Matrix Corner, Howick Close, Waterfall Park, Midrand.
Directors
SR Bruyns (Chairman); SB Joselowitz (CEO);
R Botha; TE Buzer; SPJ Evans (CFO), RA Frew*;
R Friedman*; A Patel*; CWR Tasker;
AR Welton; F Roji* (alternate)
* indicates Non-Executive
indicates Independent Non-executive Director
Company Secretary:
Probity Business Services (Proprietary) Limited
Reporting Accountants:
PricewaterhouseCoopers Advisory Services (Proprietary) Limited
Auditors:
PricewaterhouseCoopers Inc.
Sponsor:
Java Capital (Proprietary) Limited
Website:
www.mixtelematics.com
Date: 08/06/2009 08:30:03 Produced by the JSE SENS Department.
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